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Case #1: Review Costs Associated with Water and Sewer Extensions; Ramsey Elementary School Expansion Finance Officer Hart reported that the extension of water and sewer to Ramsey Elementary School is nearing completion, as well as several projects which were additions on to the original project. The total estimated project cost is $806,133 and is to be funded through collection of trunk and lateral charges from Ramsey Elementary School, Haubrich Addition, Fox Knoll 1st and 2nd Additions, Juskiewicz Addition, and Green Addition. The charge to the school was based on a commercial acreage charge and the others on a residential unit charge. The school was billed for a total amount of $560,361, of which they have paid $330,000. Ramsey Elementary is contending that the amount they are being charged for the trunk costs is too high. They have requested consideration under the residential fee structure which would save the District money but would cost the City approximately $175,000. The City is already contributing in excess of half of the total project cost through contributions from trunk funds for over sizing and for completion of the project. This deficit will be recovered in future trunk charges and access fee transfers; however, the City will be carrying the deficit during the interim. Ms. Hart repeated that the Elementary School has already been billed, and has paid for, the charges of WAC, SAC and SAC handling fees which amounted to $174,375 (of which $63,750 of SAC was transmitted to MCES and not available for City use). The other subdivisions will also be charged the WAC and the SAC handling fee which will be approximately $128,520 (does not include the SAC to be transmitted to MCES). These are for future expansion of the water and sewer systems, such as wells, towers, and lift stations. Ms. l-tan explained that it is staff's position that trunk charges for Ramsey Elementary have been calculated in a manner consistent with other projects and that a reduction of these fees would place a burden on trunk funds already encumbered for projects already detailed in the 1996 - 2001 Capital Improvement Program. Councilmember Beyer inquired if the cost wasn't negotiated in a contract. Mr. Schroeder responded yes but they have asked for a negotiation and staff is bringing it back to the Finance Committee to be certain that there is agreement that they should be billed for this amount. Councilmember Peterson commented that this is not the first project they have done - they agreed to the contract. Councilmember Zimmerman felt there should not be a change. Motion by Councilmember Zimmerman and seconded by Councilmember Beahen to recommend Council approval affirming the trunk charges for Ramsey Elementary School and instructing the Finance Office to submit an invoice for the remaining $230,361 of trunk charges. Further discussion: Councilmember Beyer stated that the City needs to talk to the school. It sounds like we are being hard-nosed. Mr. Schroeder replied that we have met with them three times. We gave them a $26,000 break. We agreed to reconfigure and in the meantime, they agreed to pay one-half the cost. We gave it another look. We determined there's no opportunity to give them a break. Mayor Hardin suggested calling them prior to billing them. Councilmember Beyer stated it seems so strong arm and "bullish". Ms. Hart commented that they have had these numbers for over a year. Motion carried. Voting Yes: Mayor Hardin, Councilmembers Zimmerman, Beahen, Beyer and Peterson. Voting No: None. Finance Committee/April 23, 1996 Page 3 of 4